Bangladesh to Slash Its Own Climate Adaptation Fund

Jun 18th, 2014 | By | Category: Bangladesh, Government Policies, News

604(Thomson Reuters Foundation) – Bangladesh plans to cut spending from its own budget on climate change adaptation and rely more in the future on funds from donors, government officials said.

The low-lying South Asian nation, considered one of the countries most at risk from climate impacts such as sea level rise, worsening erosion and erratic rainfall, has been a leader in the developing world in committing its own funds to climate adaptation. Officials allocated $320 million from the country’s budget over five years to a domestic climate adaptation fund, said Finance Minister A.M.A. Muhith in a budget speech to parliament.

But “this allocation will be reduced in the future and instead steps will be taken to increase (funding to) the Bangladesh Climate Change Resilience Fund, established with the assistance of our development partners,” Muhith said in a June 5 speech. That fund has so far received $187 million from international donors, with some of the money going to adaptation projects.

The minister proposed no new funding for the Bangladesh Climate Change Trust Fund (BCCTF), the country’s own adaptation funding initiative, in the next budget.

The change comes as part of an update to the Bangladesh Climate Change Strategy and Action Plan of 2009.

MISUSE OF FUNDS

Critics of the decision said the change in strategy comes in part because of questions raised about the alleged misuse of funds from the country’s adaptation trust fund, and the government’s desire to avoid further controversy in the future.

Last October, the Bangladesh chapter of Transparency International said it had found evidence of political influence, nepotism and corruption in the way funds were allocated.

“A significant amount of money had been allocated for the BCCTF in the last five years but the spending was poor. Besides, the way the fund was managed has raised questions for many, which led no fresh allocation in the new budget,” Shamsul Alam, a member of the Bangladesh’s Planning Commission, told the Thomson Reuters Foundation over telephone.

He said one advantage of relying on donor-funded climate adaptation projects it that they help transfer expertise and modern technology on adaptation, something Bangladesh in some cases lacks. “Capacity building of people on the ground is a must to adapt to climate change impacts,” he said.

Asked if donors might feel less willing to channel money to Bangladesh as a result of the government cutback in its own spending, he noted that in the new budget the government has imposed a “green tax” on industries that do not have a waste treatment plant.

That change “proves Bangladesh’s sincerity to climate change adaptation and keeping the environment free of pollution,” he said.

Atiq Rahman, executive director of Bangladesh Center for Advanced Studies (BCAS), told the Thomson Reuters Foundation in a telephone interview that Bangladesh still has a lot to do to adapt to climate change, particularly as it is so vulnerable.

He said the southern part of the country is particularly vulnerable, with 20 million people already lacking sufficient food, safe drinking water and sanitation systems. Drought-prone northern districts will also need large-scale climate adaptation programmes, he said.

DISCOURAGING DONORS?

Rahman said he thinks the government’s decision to cut its own spending on climate adaptation is the wrong one.

“The BCCTF should be kept well funded and replenished to encourage donors to pay more in the resilience fund. Unless you pay a portion on your own, why will donors feel interested to pay for your adaptation programmes?” he asked.

But greater transparency needs to be put in place in the spending of climate funds, to ensure the money goes to support people in the most need of help.

Hasan Mahmud, a member of parliament and Bangladesh’s former environment minister said adaptation projects costing less than $25 million will suffer the most if Bangladesh’s adaptation trust fund has no resources.

Donors for the most part only sponsor climate resilience projects larger than $25 million, he said in a telephone interview, but many of the projects Bangladesh needs most cost in the range of $5 million to $10 million.

“Big projects are not needed everywhere,” he said.

The government’s decision to create its own adaptation trust fund was highly praised by donor agencies and countries and a major encouragement for them to channel money to Bangladesh, he said.

“Donors felt (the depth of) Bangladesh’s seriousness about adaptation, despite not being responsible for climate change, following formation of the fund. Now the donors may get a wrong message and raise questions about whether we need any more adaptation funds since we have stopped spending from our own,” Mahmud warned.

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